Tenants, landlords join to find the right creative space

Tenants are looking for a space that can serve as a catalyst for creativity, and buildings are being redesigned to fit those needs — but there isn’t a one-size-fits-all answer.

“We’re actually not recommending clients go into open space. For some clients, it’s appropriate, but not for every client,” said Jeff Hollander of the Hollander Design Group. “We’re spending a lot more time with the predictive index and personality types and not doing 'one station fits all.' … Some people need open space and some people can’t survive out there.”

Hollander joined Tom van Betten, managing director of tenant representation at Cassidy Turley; Dick Balestri, senior vice president of CBRE; and Caroline Perry, associate general counsel for the San Diego Padres on a recent panel discussion moderated by Kellie Hill, senior project director at CBRE. The event was hosted by CREW San Diego at the Skybox at DiamondView Towers.

The panel discussed the development of the new Pirch headquarters and the Old Candy Factory restoration into Bumble Bee Food’s new headquarters.

Hollander sat down with every staff member at Pirch before speaking to executives to find out what they wanted in the office.

Pirch resells high-end kitchen and bathroom equipment at a discount. A promotional video shown to the CREW audience described the Pirch experience as “turning visions into moments of joy and filling hearts with golden new memories.” Pirch wanted the culture and experience in the retail stores to continue into the corporate headquarters and distribution centers, van Betten said.

Hollander read the quote, “Customers can smell bullshit from a mile away,” and said employees can, too.

After sitting down with the employees, Hollander discovered that they wanted a gym. They saw kitchen equipment around them all the time but weren’t able to use it — they wanted to be able to use the equipment that was sold. They wanted fresh air and light — “the same things so many clients want,” Hollander said.

But the real estate in the community doesn’t always support the wants of clients, forcing people like Hollander to be creative.

“We live in San Diego and then we go inside and we live in these gray boxes. That doesn’t need to be,” Hollander said.

Pirch wanted a headquarters to be a bicycle ride away from its store, restricting the options in an area where there wasn’t a lot of creative space in the size they were looking for, Hollander said.

They made a deal with The Irvine Co. for a building that was not what the founder pictured the company launching in — he wanted something “unique and attractive,” and this was a two-story tilt-up. But the campus product was half the price of a Class A building in the UTC area, allowing the company to spend some of its own money to create the environment they desired.

Hollander said they created an open-lobby plan, removed parking spots and added an outdoor garden.

“We had to go through a process to convince them that this is something they could do, something they should do, and — more than that — something they wanted to do,” Hollander said.

The Irvine Co. and Pirch needed each other: Irvine took a standardized product and customized it to each tenant, and Pirch found the opportunity to re-create a space in a public way, Hollander said, which can be used to demonstrate what can be done in future buildings.

“What our job is on the real estate side [is to] help landlords connect the objectives of the businesses leasing that space,” van Betten said.

And that’s how Bumble Bee ended up signing a lease at the Old Candy Factory and in April will move in, Balestri said. The three-story building was originally situated in left-center field outside the fence at Petco Park, and it was rolled across the outfield exterior to its present location near right field. The building has sat vacant since the ballpark opened in 2004.

The ground floor was designated through a grant deed to be retail space, but interested occupants quickly lost interest when they discovered there was no street frontage and it is inside the gates of the ballpark.

After much work, Bumble Bee signed the lease for all 30,000 square feet of the building. Bumble Bee is coming out of a more traditional Class A office space, Hill said, and was receptive to open space and a creative new generation of office space after seeing Hughes Marino’s office on Front Street, Balestri said.

Hill said it’s important not only for the tenant to see and understand the value of a creative space, but also for the real estate community to “see it, understand it and really educate tenants in regard to what it can become.”

The momentum for creative office space will pick up as more examples become available for businesses to see, Hollander said.

The cost of these changes is also important for clients. While specific dollar amounts weren’t disclosed, Balestri said of the Old Candy Factory — “the coldest of cold shells that ever existed” — the tenant improvement allowance was more than the typical $55 per square foot in a warm shell. The lease agreement for Bumble Bee was longer term and Bumble Bee is also making an investment in the space.